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Prices remain high but the number of sales and new listings are falling rapidly as the market prepares for the winter slowdown

Property
Prices remain high but the number of sales and new listings are falling rapidly as the market prepares for the winter slowdown

The median price of homes sold by Barfoot & Thompson hit a new record high of $820,000 in April, compared to $798,000 in March and 2.5% up from the previous all time high of $800,000 set in December last year.

However the real estate agency, which is by far the largest operating in the Auckland region, also reported a sharp downturn in the number of homes it sold.

Barfoots sold 944 homes in April, well down from the 1341 it sold in February and down 126, or 12%, from the 1070 it sold in April last year.

The was also a drop in the number of new listings, with the agency signing up 1496 new properties for sale in April, compared with 1874 in March and 1580 in April last year.

That was the lowest number of new listings for the month of April in three years.

"In April we sold the lowest number of homes we have sold in an April in four years, and the likely cause of this was caution around current pricing and the low number of properties on the market, restricting choice," Barfoot & Thompson managing director Peter Thompson said.

"Overall activity in April is best described as restrained," he said.

And the total number of homes the company had for sale on its books at the end of April was the lowest it had been in the month of April for 15 years.

"While choice across price segments was low, interest in top-end homes remained high and 355 properties or 37.6% of all homes sold attracted a price in excess of $1 million," Thompson said.

Barfoot Auckland

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52 Comments

The Auckland housing market has hit its peak in August 2015 and has been trending downwards since then. You just need to look at the stratified index. http://www.interest.co.nz/charts/real-estate/house-price-index-reinz-rb…

You would almost have to be thick or completely biased to ignore this fact. However, everyone including majority of the media only seems to using real estate company data looking at their Median price. Having an overall city Median is absolutely useless in explaining what is happening in the market. For example, if in one month you only sold houses in Remuera, it would seem like the Median has skyrocketed whereas the next month if you only sold houses in Otara/Clendon it would seem like it has crashed.

We have been tracking the data for many months now and if you compare suburb by suburb data, it has been flat / downward since mid last year. it seems now even the real estate companies have given up spruiking the market now and are being cautions in their statements seen by Peter Barfoot's comments today:

"and the likely cause of this was caution around current pricing and the low number of properties on the market, restricting choice." - This implies that people are reluctant to sell at a lower value than they previously bought.. i.e. the market is not willing to meet their asking price. However, it seems that there are a few buyers going all in as they have been previously missed out over the past year - this is temporarily holding up the price for now.

"Overall, activity in April is best described as restrained"

"The average price for April at $873,599 was up only 0.8 percent on that for March, and 8.6 percent ahead of where it was in March last year". - Notice how he compares April's data to MARCH last year so it reads an annual increase of 8.6%. If he had actually compares April 2016 price to April 2015%, the annual gain would be around 2%.

Our analysis now confirms there is only one direction for the housing market in the near future.

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Yeah mate unfortunately only a minority will ever get this too most median average index isn't even read they just look for pretty figures with a % sign next to them.

March rebounded in auckland a bit, likely a bump from a number of people who had bought earlier conditional to getting ird number etc and this back log moving through.

But I think this will be a one off bump up and the trend will continue to be flat and falling in some parts for auckland index prices.

Which should mean another ocr cut or 2.

And steady price increases in decent sized towns (50k plus) outside of auckland as it becomes so much cheaper to own than rent due to 4% mortgages

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Interesting that this stratification you linked to paints a different picture to the REINZ page it's apparently pulling it's source from?

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/Public%20HP…

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Updated for March where there was a big bounce back.

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Didn't even notice that Interest was a month late ;)

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Interesting graph, it shows that Auckland is currently on par with the historical average of houses doubling in value every 10 years and the rest of NZ is well below, due to several years of flat values

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Might have been true in the past but highly unlikely to continue in a world with 2% inflation targetting.

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So, you are wrong. Because you are viewing an old graph you miss the point that the stratified housing index for auckland is now higher than it has ever been.

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At the risk of coming across as being cocky, I predict 80% comments to fall within one of the following categories:

a. This is madness, insanity...
b. Let’s bring X (tax / ban / restrict / etc.), problem solved. It is that simple.
c. This government blah blah
d. Its immigration, no its not, yes it is...
e. Bulls, we told you…
d. Bears, wait it’s about to burst then I'll buy…
f. Few generation related comments, its Baby Boomers, Its Gen X...

I continue reading and searching for those few - fresh and interesting comments (far and few in-between)

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Or perhaps instead of whinging add some "fresh and interesting comments" yourself?

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My generalisation was meant to be funny though it does read a tad whiny now that I read it again. Thanks for your suggestion nonetheless Frazz.

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a 17 year old can see the problem but you cant?

My story as an Asian Kiwi in our changing house market.

Recently, there has been an extreme influx of foreign buyers in the housing market. As a last year high school student, this isn't something that's the centre of conversation, but something that hangs on my mind, behind the piles of school work to get through.
Being a Chinese youth who grew up in New Zealand, I am proud of who I am. I am proud of my heritage and of my culture. I am proud to have been born a New Zealander. I am proud that I have grown up in the New Zealand schooling system. I am proud of my parents who worked day and night to give me the life I have now. I hope to contribute to society as much as I can when I can. However, just recently, I no longer feel like I am welcome in the country I have lived in for my whole life. I am viewed daily as "just another foreigner" who is here to take houses away from local New Zealanders. Despite how much I love the land I spent my childhood in, I get annoyed glances because people who share the same blood as me are taking away opportunities that rightfully belonged in our society. Except these opportunities are taken from me too. I do not have extremely wealthy parents who can support me when I want to buy a house. I do not have any advantage over any other young high school student. I have no one to count on but myself

When my parents immigrated, they gave up many opportunities and came with nothing. However, instead of living on the great public benefits that New Zealand provides, my parents hustled extremely hard. Starting with just minimum wage jobs, every dollar was saved where we could to pay for the mortgage of our first home. This meant my brother and I were never able to get the newest clothes and toys we wanted, and we learnt to settle with what we had.

The road to where we are now has been a hard grueling one. Since we were young, my brother and I learnt that if we wanted to be wealthy, to be able to afford our dream houses and dream cars, we have to work hard. Like many other high school students, I try my very best in all my subjects, and have many goals I am working towards regarding university and beyond. After almost 18 years, our once extremely poor family can now be considered well off, and I am almost going to start the journey for myself.
However, after becoming aware of the significantly increase of house prices in Auckland, I felt a strong need to go look at it for myself. From the perspective of many foreign buyers I have talked to, New Zealand is like a haven compared with many other countries. Our society is mature and well developed. Our environment is to be envied. Our house prices are comparatively low. It's a great investment to diversify wealth, to many different countries. Unlike other options such as Sydney, there are no constraints. However, whilst New Zealand seems like a great place to invest in, this influx of money is not purely positive.

House owners are delighted, as significant increase in demand has resulted in house values skyrocketing. My parents were lucky to be able to benefit from this, and thus increase our living standard through their hard work. However, as a young student, this is terrifying news to me. This increase in housing price is just increasing the seemingly unreachable wealth gap. I have first handedly experienced the difference throughout the years. The cost of our first family home was just under $400,000 when we purchased it around 10 years ago, but now it has a market price of over double. However, the amount my parents earned around then were not that different from how much I hope to earn out of university. Something that used to be attainable through hard work is no longer something we can achieve through hard work. Our unnatural increase in housing price is making it impossible for our generation to purchase our first home without significant funding from our parent. This is means that even if you work your hardest, without prior wealth, it is almost impossible to take the first step into the house market anymore.

This is the world that I live in. I am a minority, who identifies with the majority, but is identified as outsider. I am not considered to be on the same side as everyone else. I am considered as one of the people taking opportunities away, even though the very same opportunities have been taken away from me.

By Anonymous (Age 17)
02 May 2016

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I get annoyed glances...

This is the world that I live in. I am a minority, who identifies with the majority, but is identified as outsider. I am not considered to be on the same side as everyone else.

This young lady is developing quite an inferiority complex. I shall have to stop scowling at recent arrivals who insist on walking on the wrong side of the footpath.

I also very much doubt her parents received no support from NZ society. They have done very well here by the sounds of it as a result of being able to freely partake of NZ's social capital/infrastructure. This is not some barren wasteland.
I have started to notice a developing ethnic activism in the Chinese community here which I understand is getting quite big in Canada. Check out this article by a Chinese-Canadian professor:

white-supremacy-and-the-foreign-investment-debate

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No wonder Pony Tail man has had a couple of job interviews, one at the BoA and the other with the US Fed.He's really not interested in curbing or should I say lancing the Housing Bubble. The financial segment of speculative mortgages in play in the GDP is about $38b per year, a big chunk of the $240b - $246b GDP.
Combined with the dying dairy sector and the compounding trade deficit running at -$4b and mounting foreign debt -$153b. NZ mortgage loan book is more than -$280b! Add to that the Land values for housing are calculated separately. The latest valuation is about $400b.
....I remember, there was a guy called Dr Doom in 2006,2007 and again in 2008 that described a similar scenario as this and everyone ridiculed him and pooh pooed what he was saying....look what happened.

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Su30 is right in that comments are very repetitive especially from the usual suspects. I like to think that some of mine are interesting though...

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Zac, I do find your comments interesting along with a few other members. You do think in quite a different way than what I typically would and hence I personally quite enjoy them. Having said that, the mood here is a bit more aggressive and serious lately (understandably).

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Su30, thanks and yes you are right the mood has turned a bit more aggressive and it is hard at times to avoid responding in kind. Things became more serious when I lost the other half of my comedy act, the inimitable doublegz, who despite insistent claims is actually a real and different person.

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Yeah I believe you. May be DGZ is reading this from the other side of the trans-warp hub you never know...
http://www.trademe.co.nz/property/residential-property-for-sale/auction…

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Echinops, I believe DGZ made it past the Great Filter and through to the other side yet is still with us in spirit now.
Nice property btw, I can imagine playing croquet and eating cucumber sandwiches on the lawn.

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Hehehe yes :-)
This property will be a #GoodBuy

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DGZ was entertaining and insightful at times. I can see why some peeps think you and DGZ are the same, I personally do not believe that.

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Zachary, the doublegz/DGZ title is now yours. You're the only one here now who can have it...would you accept it?

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I am not worthy of that esteemed title, perhaps the young Echinops could take up the mantle?

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Zach/DGZ a lot of your comments are pretty cruel especially when you talk about the need for Auckland to be exclusive. Interesting in that they are cruel , insensitive and inflammatory.

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Gordon, you sometimes read in the news about a leafy inner suburb being "exclusive" although this word is often replaced with "expensive" now which is practically the same thing. I think the word exclusive may offend you because it evokes a sense of rejection that may apply to our own children and grandchildren. Unfortunately, yes, it does. But this is because civilization has gone global. Gone are the days when exclusivity could be claimed on place of birth alone. We can now no longer, though Singapore gets away with it, discriminate so boldly.
With the advent of globalization expensive suburbs have grown to encompass whole cities. Principle Principal cities in the old Commonwealth countries that inherited the British social systems and speak English are particularly attractive. If we made houses in these places much more affordable to everyone in the world we may well be overwhelmed with the influx and see our standards swept away and gone forever. The one and only way of avoiding this is acheiving exclusivity through price. I am hoping that everyone can get onboard with this project.

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Zachary,,
Do really believe what you write,or you 'just taking the piss', as we Glaswegians would say. By the way, principle should be spelled principal,but being a snob doesn't mean you can spell.Perhaps the servants do that.

"If we made houses in these places more affordable to everyone in the world,we may well be overwhelmed with the influx and see our standards swept away and gone forever".

Well,absolutely,got to keep the riff-raff out.

I can't wait to hear more about your project-a gated community with armed guards perhaps?

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The new word for exclusive is 'affluent' e.g. 'Epsom is an affluent Auckland suburb within the double grammar zone and surrounded by many other exclusive private schools'.

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Are you for real Zach/DGZ ? I take it you are saying that Auckland should be full of middle class white anglo-saxon people preferably professional people and no one else. Heaven forbid if you are as I believe Auckland benefits from its multiculturalism. I do not live there as you know but we have multiculturalism right through the country and a lot of the people who have come here contribute very positively to our country.

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Oh, don't fret. The more successful organised crime kingpins will also be welcomed.

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Gordon - you should get into politics. Become NZ's version of Bernie Sanders. You'd have my vote!

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I believe Zach/DGZ has told us at least once that he supports Trump. Says it all really.

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Tonight I am celebrating the glorious victory of the golden-haired one.

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I second Independent_Observer's observation (pun intended). Admirable play of words with a dash of popular sentiments thrown in. I temporarily fell for it and actually went over Zac's post twice to see if it had any implied or direct suggestion to exclude any ethnicity. Found none.

Zac, 'unfortunately' I do agree with your perspective around globalisation, cities turning into suburbs and exclusivity. I use the word unfortunately since I don’t think we can control it even if we wanted to. The drivers behind this phenomenon are global and far too strong to be reigned in by any willing political party. We are connected enough with the world (exports, tourism, international students) that makes this global phenomenon inevitable sooner or later.

BTW, my vote goes to Max DeCosta from Elysium ;)

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I don't think my comment implied excluding anyone by ethnicity. It is more wanting to see a city where everyone aspires to live in the manner of professional middle class white anglo-saxons. There is a subtle difference and it is actually people around the world that want to do this and not me necessarily. A lot of migrants didn't vote for the new flag because they deliberately came here to live under the Union Jack.
The point I am making is that in a world of fairly open borders certain cities are going to attract the wealth and because wealth is exclusive these cities will naturally evolve into essentially super-sized affluent suburbs. The reality is not very nice for many locals as they will find themselves squeezed out by people they see as "foreigners". However the situation does present an opportunity for those who can see ahead.

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@ Zachary, Auckland is not Elysium!! And if we keep going down the extremely over inflated and unaffordable property road, all we'll eventually end up with is gated communities within a crime ridden city.

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Sounds very Ayn Rand
My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.” — Ayn Rand
A part of the american dream, currently in tatters..

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veryone aspires to live in the manner of professional middle class white anglo-saxons
that may be so but the reality is anything but, the new cultures are adding diversity which is good, but is auckland heading towards becoming a mirror of many of the cities that people are escaping from to find a new and better life.
traffic is getting worse by the day, a lot of places are becoming crowded, and with that will attitudes towards each other change as well, my fear is the kiwi manners,patience and friendliness will slowly disappear out of Auckland.
I notice the difference every time I come back from staying down country, Auckland city is slowly changing to a everybody for themselves city and losing that community feeling.
10-15 years ago how many of your neighbours in your street or suburbs did you know and interact with compared to now
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11633659

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g. Its a "ponzi" scheme.

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haha - dang it, how did I miss that? Thanks!

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Okay , so when is the Government going to wake up from its slumber .

The knock-on effects of this are not going to be pleasant .

Firstly , young Kiwis are going to vote National OUT because they have been reduced to being serfs (tenants) in their own country .
Secondly , when the market adjusts , as it will, everyone will blame John Key for doing nothing to stop the rot ( remember how everyone blamed Helen Clark for the Finance Co collapses )
Lastly , we putting our entire financial system at risk by not curbing this overheated property market , its just plain irresponsible to do nothing .
Everyone else has taken steps to curb overheating housing markets from the BoE to Singapore , Australia, Canada.

We are at the back end of nowhere , happily marching to the beat of our own drum .

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Please see Mecheng's comment above. Everything is under control.

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Zach/DGZ I think you could be right this time. It is under control in Auckland as volumes are down and from April 15 to April 16 average Auckland prices only went up 2% . Peter seems to be saying that buyers are getting worried about paying too much for Auckland property and that is effecting sales. He could have used the word "fearful" of paying too much. As QV have indicated today those who shifted their focus from Auckland to Tauranga and Hamilton have been very smart.

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Possibly. Though the only two prices that matter are when you buy and when you sell. Everything in between now and then is just noise.

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Never as MP's world wide always have their noses in any trough where they can get a financial benefit from.
Remember we are dealing with people who in the past and while we were all sleeping one night put through every part of the bill that improved their Superannuation Benefits. This involved all parties agreeing to the process and passing each part of it. They are there for themselves first and us second. Don't fool yourself in thinking anything different. If more of X and Y actually voted it might make a difference. Boomers generally vote as we have been brought up to vote and therefore they get the ears of our MP's who have a large stake in residential investment properties overall. I agree things need to change but it will only happen once MP's realise their future as an MP is in jeopardy if things do not change.

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Property is such a psychological game, hence the volatility. For me overtaking Sydney and becoming the most expensive city in the world relative to income was a huge milestone and psychological
ceiling. Yes there are other complex factors at stake such as increased supply in Sydney etc. For most people, including people who have really benefitted from this boom, there has been a sense of the inevitable that we have finally reached the top. That's it's gone too far. Enough is enough now. I do hope there isn't panic selling though.

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It will take time for any financial pain to show through that will force selling. Banks also give a lot of opportunities to sell when a property is heading towards a mortgagee sale. If the sales peak is over then it's probably another 12-18 months to start seeing any issues (although lower interest rates will delay this).

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Was thinking more about speculators

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I think you will find Y and Z disagree with you about panic selling. They would love it to happen. It might mean houses come back to 7 to 8 times in Auckland. Back to sensible levels of borrowing versus income.

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Well I would like prices to come down too but my income would suffer from a general economic downturn. With the rest of the economy being pretty weak a dire housing crash would not be great. On the upside prices coming down will mean some will be taking on less debt and will have more disposable income which would be positive.

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Yes and the other main factor for why AKL is starting to flat line is that the majority of Auckland Mom and Pop investors are no longer investing in Auckland, they prefer to hold on to their home and use any capital they have and equity available, to invested in more affordable areas like Hamilton and Tauranga.

Even those who are renting in Auckland are not foolish enough to buy in the massively over inflated Auckland market, instead if they can afford too. They are using other investment strategies to purchase a home. Such as using a technique called 'Mouse holing' where you buy a property in a more affordable and up and coming area, rent it out and wait for it to increase in value to allow you to settle in that area later in life or sell up and move on with gained capital investment.

So it's not surprising that people are holding on to their properties if they can, if they can use the equity to help their children purchase their first home else where.

The only ones that are able and to buy in this crazy AKL market are Non-Residents and very wealthy new immigrants.

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Pete also didn't mention that the average sales price is still lower (slightly) than November's high.

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Hang on. I thought we were all in a state of panic / glee because a new boom was underway.

Or was the house horny media just manipulating emotions to get more ad impressions. Ho hum.

Never fear it's the year of the monkey and Ron Kong Phooey says it's all going to go bananas in May!

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